Investors in the retail sector had a collective panic attack yesterday. Macy’s made an announcement that it would see shrinking gross margins of around 1% this quarter. The comments sent the whole sector into a tailspin, with Macy’s tumbling more than 8%, J.C. Penney fell more than 4%, and Kohl’s almost 6%. Macy’s said it was taking a long time to clear excess inventory, which would wound its margins. The company is closing scores of stores and is seeking to reinvent itself as more of a fashion destination.
FINSUM: Macy’s has a lot of work to do to regain a strong footing in the current retail environment. We expect a lot more bumps in the road before things improve.